By Joseph Autilio
Q. As a broker may I pay a non-licensee for a referral?
A. The simple answer is no, and this question arises with some regularity. In essence, the relevant licensing law provides that “a broker is one who for another and for a fee, commission, or other valuable consideration, or with the intention or expectation of receiving or collecting a fee, commission, or valuable consideration, sells, exchanges, purchases, rents, or leases an interest in real property or assists in the procuring of prospects which leads to or is intended to lead to the sale, exchange, purchase, rent, or leasing of an interest in real property.”
This definition is contained in General Laws of Massachusetts Chapter 112, Section 87PP and, in relevant part, states that no person shall engage in the business of or act as a broker without licensure as such. Lastly, General Laws of Massachusetts Chapter 112, Section 87AAA(e) permits the Board to suspend or revoke a broker’s license where the broker paid commissions or fees to any person required to be licensed as a broker in Massachusetts or any other state, but is not licensed as such. This last statutory provision is furthered by Board Regulation 254 CMR 3.00(14) (f).
The aforementioned statutory provisions and regulation are simply saying that a broker cannot compensate (share in his/ her valuable consideration) someone who is practicing brokering without having a license to practice brokering. Having said this, however, it is important to note that the seller and buyer in the transaction, often referred to as the principals, do not need to have a license to sell their own real property or to purchase real property themselves. One who sells his own real property or purchases real property for him or herself is exempt from the licensure requirement by virtue of General Laws of Massachusetts Chapter 112, Section 87QQ. This has been the Board’s interpretation of the statute for well over 20 years and it is our understanding that it’s consistent with the view of most Real Estate Boards and Commissions throughout the United States.
Serving on the Board
Q. Can I serve as a public member of the Board?
Public members provide valuable public input into Board deliberations and decisions. Most statutes provide for public members to serve on licensing boards. If you’re interested in serving on the Real Estate Board (or any Board within the Division of Professional Licensure) please visit the DPL website at: www.mass.gov/dpl/
The Board of Registration of Real Estate Brokers & Salespersons office in Boston can be reached at 617-727-2373.